Are you thinking of taking the plunge into homeownership but not sure if it is the right decision?
If you have done any research on the matter, it is no secret that the benefits of owning a home far outweigh those of renting in the long run. I could go on and on with all the statistics out there, but let’s just highlight a few of the pros and cons.
Here are the pros…
1. Rent increases over time. However, when you buy a home, your mortgage will not increase over the life of the loan, which is typically 30 years. This means you don’t have to worry about rent increases during every renewal.
2. Interest rates are relatively low right now meaning owning could be more affordable. Home prices may be high, but low interest rates mean that your monthly mortgage payment could actually be lower than your monthly rent.
3. Every month, a portion of your payment goes towards your principal, helping you build equity in your home. When you are renting, your rent pays your landlords mortgage and helps them build equity.
4. You have the ability and freedom to customize or renovate your home. No need for those renter friendly hacks, because you are in control.
5. Real estate tends to increase in value over time, meaning you can build wealth with real estate.
However, the cons:
1. Owning is a long-term decision. If you are not ready to commit to one home for at least a few years, renting may be the better option.
2. Owning can be more costly upfront because of your downpayment and closing costs. Renting typically only requires a deposit and first and last month’s rent.
3. Owning is more responsibility. There is no landlord to call if the refrigerator breaks. However, there are programs like home warranties out there that can help with this, but we will talk about that later.
If the pros excite you, stick with me as we answer the question…Is it time for YOU to fire your landlord?